New data from the Bureau of Labor Statistics show that unemployment rates in Arkansas metro areas are all down from a year ago, but the pace of decline has slowed. On a year-over-year basis, the state-wide not-seasonally adjusted unemployment rate has fallen by 0.6%. In six of the eight metro areas that include parts of Arkansas, rates have fallen by more than that.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

On a month-to-month basis, seasonally-adjusted metropolitan area estimates show the unemployment declining in all eight metro areas in June. In six of the eight metro areas, the June decline was larger than the 0.1% drop in the statewide data. Unemployment rates are now at 5% or lower in four of the state’s metro areas.

As shown in the figure below, the seasonally adjusted estimates rose somewhat in the earlier part of this year, particularly in metro areas with relatively high unemployment rates. Hence, unemployment rates in those areas are unchanged or up slightly compared to their low points earlier this year. In the four metro areas with the lowest unemployment rates, however, the trend continues downward. Where unemployment rates are at or below 5%, we should not expect significant further reductions.

Payroll Employment
Nonfarm payroll employment rose in June for six of the eight metro areas, but was down in Fort Smith and Pine Bluff. Those two metro areas are also the only two that have experienced declines over the past 12 months as well. According to the report from the Bureau of Labor Statistics, Pine Bluff retains the dubious distinction of having the largest percentage decline in employment nationwide. On a more positive note, a 1.3% employment increase in Hot Springs made that metro area the fourth in the state to break the barrier of having higher employment now than before the 2008-09 recession.

Source: Bureau of Labor Statistics, Current Employment Statistics

The figure below illustrates the wide range of payroll employment growth since the onset of the recession (smoothed, by taking quarterly averages of the monthly figures). In Jonesboro, employment is nearly 13% higher than it was in the fourth quarter of 2007. At the other extreme, employment in Pine Bluff has fallen by more than 16% over the same period.

The unemployment rate ticked down to 5.7% in June from a revised 5.8% in May. The rate has been hovering in range of 5.6% to 5.8% since last fall. The unemployment rate had come down rapidly during 2013 and 2014, but it is not surprising that its descent has slowed as we get closer to full-employment.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS).

The underlying components of the unemployment rate, derived from a household survey, showed slightly improving conditions. In particular, the number of unemployed Arkansans was down slightly in June, following three consecutive monthly increases. The number of employed was up for a 20th consecutive month, and has increased by over 45,000 over the past 12 months. As a result, the labor force continued to expand in June. Since April 2014, the Arkansas labor force has expanded by nearly 44,000, offsetting about 60% of the decline that we saw from November 2011 through April 2014.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS).

Payroll Employment
As is always the case in June, the monthly figures on payroll employment were influenced by predictable seasonal factors. In particular, the not-seasonally adjusted data showed sharp declines in Education Services and Government, both reflecting summer break at educational institutions. Seasonally adjusted data for these sectors were flat, however, reflecting the fact that the May to June change was typical. Overall, the not seasonally adjusted figures showed a decline of 3,100 jobs, but after seasonal adjustment total nonfarm payroll employment was up by 1,800.

A rather sharp increase in Construction employment in June (+1,700, seasonally adjusted) was welcome news. Employment growth in that sector had sagged earlier in the year, but recent growth suggests that the earlier setbacks were, in fact, largely related to poor weather conditions. The only significant weakness in the monthly employment figures was in Leisure and Hospitality services.

New data from the Arkansas Realtors® Association indicates that May was a very strong month for home sales, up 11.5% compared to May 2014. Total sales for the month were 2,579, the highest single-month of sales since the summer of 2007. Home sales are typically highest in the summer months (June-July-August), so the May figures suggest a 2015 housing market that is continuing to improve dramatically, with strong momentum going into the summer months.

Source: Arkansas Realtors® Association

After removing the typical seasonal variation in home sales, the following chart shows an extended uptrend in sales that has prevailed over the past 3 years. Relative to the trend, May is clearly a strong month. However, it follows some weakness over the recent winter months, which were affected by some unusually harsh weather conditions that might have delayed some transactions. As is usually the case, the next two or three months will be important for gauging annual sales totals.

New data on metro area employment and unemployment came out today, including newly revised unemployment figures from the smoothed seasonally adjusted estimates. On a not seasonally adjusted basis, unemployment rates in Arkansas metro areas ranged from a high of 7.7% in Pine Bluff to a low of 4.3% in Fayetteville. All eight of the metro areas that include parts of Arkansas have experienced declines in unemployment over the most recent 12-month period. The largest year-over-year decline was in Texarkana — down 1.2%.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Since the data revisions earlier this year, smoothed seasonally adjusted estimates of metro area unemployment had not been available. The process of updating seasonal factors is now complete, so we new have a new set of estimates to compare month-to-month changes in unemployment rates around the state. As shown in the table below, changes in unemployment rates from April to May were mixed. Unemployment rates were up in Memphis and Pine Bluff, and were unchanged in Fort Smith and Jonesboro. In the other four metro areas, unemployment rates moved one-tenth of a point lower. Statewide, the unemployment rate was unchanged in May.

The revisions to seasonally adjusted unemployment rates come from three sources. First are the changes due to the “new generation of time-series models” that were updated to include updated estimate inputs and population controls. Second are changes in metro area definitions that affected Fort Smith, Memphis and Texarkana (see Metro Area Unemployment and Employment – January 2015). Third are the updates to the seasonal factors themselves. The net results of these updates are illustrated in the set of figures below:

For most of the metro areas in Arkansas, the revisions had the effect of raising the estimates unemployment rates for the period from 2010 through 2012. The revised statistics also show a smoother downward trend in the unemployment data for late-2013 through 2014. So far in 2015, the newly-released statistics show leveling-off of unemployment rates in most metro areas, but a move toward higher rates in some areas, particularly Fort Smith and Pine Bluff.

Payroll Employment
Data from the payroll survey show that nonfarm payroll employment changes were mixed in May. Monthly changes in employment ranged from +1.6% in Hot Springs to -1.2% in Pine Bluff. Compared to a year ago, Pine Bluff is the only metro area to have experienced a decline in payrolls. In fact, the Metropolitan Area Employment and Unemployment Summary noted that Pine Bluff had the dubious distinction of having “the largest over-the-year percentage decrease in employment” in the nation (according to the not seasonally adjusted data). Compared to employment levels before the 2008-09 recession, Little Rock has moved into positive territory, joining Fayetteville and Jonesboro. The other five metro areas in the state continue to show net declines in employment since December 2007.

Personal income in Arkansas increased by 1.0% in the first quarter of 2015, outpacing the national average 0.9%. Arkansas’ growth rate ranked 25th among the 50 states. The 1st quarter increase in income comes on top of an upwardly revised figure of 1.9% growth in the 4th quarter (previously reported at 1.2%). Over the past four quarters, incomes have increased by 4.9% in Arkansas, compared to 4.4% for the entire U.S. Relative to the previous cyclical peak (2008:Q2), incomes have risen 22.6% in Arkansas.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Farm income and proprietors’ income more generally were down, both in Arkansas and nationally. On the other hand, personal current transfer receipts were up sharply, reflecting several special factors including a 1.7% cost-of-living adjustment to social security benefits.

Earnings was up 0.7% and accounted for 44% of total personal income growth. As shown in the following table, earnings growth was relatively strong in Utilities, Construction, Management of companies and enterprises, and Accommodation and food services. In addition to the decline in farm income, earnings from Manufacturing and Mining were also negative.

Arkansas’ unemployment rate was unchanged at 5.7% in May. After having edged down to 5.6% for the first three months of the year, the state’s unemployment rate now stands at the same level as it did in November of 2014. Compared to a year ago, however, the rate is down one-half of a percentage point. The national unemployment rate was 5.5% in May. With rates now in the neighborhood of 5 to 6 percent, unemployment is approaching the “full employment” level and significant further declines are likely to materialize slowly.

Source: Bureau of Labor Statistics

Although the unemployment rate was unchanged in May, the number of unemployed increased by 673 — the third consecutive monthly increase. On a more positive note, the number of employed Arkansans was 972 higher than the previous month. Over the past 19 months, the employment count from the household survey has increased by 51,521.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Payroll Employment
Total nonfarm payroll employment was up by 1,300 in May (seasonally adjusted). Added to the 6,500 increase from the previous month, May’s increase brings employment back to its level of February — offsetting a sharp weather-related drop in March. Compared to its pre-recession level (from December 2007), Arkansas employment is now up by 2,300 jobs (0.2%). By comparison, nationwide employment surpassed its pre-recession level in April 2014, and is now up by an additional 2.4%.

Source: Bureau of Labor Statistics

The May report showed declines in the major good-producing sectors, along with Transportation & Utilities and Financial Services. Other service sectors saw employment gains, particularly Education & Health Services. Since the employment trough of February 2010 only three sectors have shown further net declines: Mining & Logging, Manufacturing, and Government. However, many of the sectors that have expanded since then are still registering lower employment totals than before the Great Recession. Manufacturing and Construction remain the weakest sectors in that regard. Combined, employment in goods-producing categories (including Mining & Logging) is down 42,600 since December 2007.

State and regional GDP data for 2014 were released by the Bureau of Economic Analysis this morning. Real GDP growth from 2013 to 2014 was 0.8% for Arkansas, compared to 2.2% nationally. Arkansas ranked 38th among the 50 states in overall growth.

Source: Bureau of Economic Analysis

The BEA News Release noted that professional, scientific, and technical services was the largest contributor to U.S. real GDP, and that nondurable goods manufacturing and real estate and rental and leasing were also strong growth components. In Arkansas, professional services and nondurable goods manufacturing contributed positively to growth, but not by as much as the nationwide figures. On the other hand, mining was a strong component of Arkansas’ growth, as was management of companies and enterprises. Week sectors of the Arkansas economy included utilities, construction, real estate, and agriculture, etc.

Source: Bureau of Economic Analysis

Although the data were not subject to major definitional changes, revisions to underlying source data turned out to be substantial for Arkansas. Growth rates over the past decade were generally revised downward, with the exceptions being 2007 and 2011. The magnitude of revisions to previous years’ growth rates serves as a reminder that the new data for 2014 are considered “advance” estimates and will be subject to revision next year.

Source: Bureau of Economic Analysis

Since the trough of the recession in 2009, real GDP in Arkansas experienced cumulative growth of 9.6%, compared to 10.1% for the U.S. As shown in the following figure, growth in Arkansas was above the national average in 2010 and 2011, but has subsequently lagged behind.

The Bureau of Labor Statistics reported this morning that unemployment rates in all of Arkansas’ metro areas were down from a year earlier. Unemployment rates have been falling for well over a year now, and the pace of decline is slowing somewhat. Consequently, the some of the year-over-year declines in April are smaller than they have been in recent months. From April 2014 to April 2015, changes in unemployment rates have ranged from -0.2% in Fort Smith to -1.1% in Texarkana. Statewide, the unemployment rate declined 0.4% over the same period.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

The data are now fully revised to reflect new estimation methodologies and data sources, as well as changes in the definitions of metropolitan areas. However, smoothed seasonally adjusted estimates have not yet been updated, so meaningful month-to-month comparisons are not possible.

Payroll Employment
Recent changes in payroll employment have been mixed. From March to April, both Fort Smith and Jonesboro saw rather sharp increases — up 1.0% and 1.1%, respectively (seasonally adjusted). Smaller gains were reported for Fayetteville, Little Rock and Memphis. The other metro areas experienced month-to-month declines. Over the past 12 months, employment in Pine Bluff has continued to decline and has been basically unchanged in Texarkana.* Year-over-year net job growth has been positive elsewhere. Nevertheless, total employment remains below pre-recession levels in 5 of the 80metro areas that include parts of Arkansas.

Note: Payroll data for Texarkana (which now include Little River County) are not presently being published by the BLS on a seasonally adjusted basis. Payroll employment figures for Texarkana refer to data that have been seasonally adjusted by the Institute for Economic Advancement.

In the first quarter of 2015, Arkansas Taxable Sales Including Gasoline (ATSIG) declined by 1.2%. Compared to the first quarter of 2014, ATSIG was up by only 0.6%. However, much of the decline in overall consumer spending can be attributed to low gasoline prices. Based on data from the Oil Price Information Service, the average price of a gallon of gasoline in Arkansas during the first quarter of the year was only $2.10, down 21.6% from the previous quarter and down 33.9% from a year earlier. Moreover, the number of gallons of gasoline purchased dropped as well: 13.8% lower than a year earlier. Total expenditures on gasoline were down 31.2% for the quarter (seasonally adjusted) and were down 38.7% from the year before.

With a smaller share of household budgets going toward purchases of gasoline, the non-gasoline component of Arkansas Taxable Sales (ATS) surged higher — up by 1.0% from the previous quarter and up 3.9% from the previous year. The non-gasoline measure of taxable sales — based on sales tax collection data from the Arkansas Department of Finance and Administration — has increased by 20.4% since the trough of the recession (2009:Q2), reflecting an average annual growth rate of 3.3%.

Arkansas Taxable Sales (ATS) is calculated by the Institute for Economic Advancement to serve as a timely proxy for Arkansas retail sales. The series is derived from sales and use tax data, adjusting for the relative timing of tax collections and underlying sales, changes in tax laws, and seasonal patterns in the data. Arkansas Taxable Sales Including Gasoline (ATSIG) incorporates data on the state motor fuel tax and gasoline prices from the Oil Price Information Service. A spreadsheet of the monthly and quarterly data is available here: Arkansas Taxable Sales 2015:Q1 (Excel file).

The unemployment rate for Arkansas ticked up by one-tenth of a percent in April to 5.7%. According to recently revised historical data for the state’s unemployment rate, it was the first uptick since January 2001. It should not be too surprising to see a slight increase. Now that the unemployment rate has fallen closer to sustainable long-run levels, it will become more common to see months where the unemployment rate remains unchanged or displays small (and statistically insignificant) ups and downs.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

As shown in the figures below, this was the second consecutive month in which we’ve seen the number of unemployed increase — up approximately 1,500 in April after an increase of 900 in March. On the other hand, it was also the 18th consecutive month in which the household survey indicated an increase in the number of employed Arkansans as well. Since October 2013, the number of employed has increased by over 50,000. The state’s labor force continues to expand — up by 4,000 in April and up by nearly 42,000 over the past 12 months.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Payroll Employment
Data from the payroll survey also indicated a strong month of job growth, with nonfarm payroll employment expanding by 6,400 jobs in April. However, much of the strength in April reflected a bounce-back from weather-related weakness in March. For the first four months of the year, net employment growth has totaled only 4,200. Novertheless, following strong gains in the second half of 2014, Arkansas employment in April was up 24,600 from the previous year.

Reflecting the improvement in weather conditions, construction was the largest single contributor to the employment increase in April — up 2,400 for the month. Education and Health Services also showed continued growth, with employment expanding by 1,700. Increases were also notable in Retail Trade and Manufacturing. Employment in Leisure and Hospitality services was down slightly for the month. However, that sector continues to be one of the more rapidly-expanding areas of the economy, with a net gain of 15,600 jobs since the employment trough of February 2010.